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ANDERSON COOPER, CNN ANCHOR (voice-over): Heroin, smack, or junk as it's known in the streets of New York sells for as much as $90,000 a kilo. The highly-addictive drug is smuggled in from Mexico and Colombia. But in increasing amounts, it's coming from Afghanistan, where American DEA agents are on the front line of the drug war. Here, the war on drugs and America's war on terror collide. In Afghanistan, the poppy trade is illegal. But opium production is soaring. The country is flooding the market with 92 percent of the world's elicit opium. These brightly-colored flowers fuel a $3 billion a year industry here. It's the machine that drives Afghanistan's economy.

But it's also destabilizing the government, filling the Taliban, the very people who gave safe haven to al Qaeda. When government eradication forces step in, the Taliban often attacks.

UNIDENTIFIED MALE: The Taliban?

UNIDENTIFIED MALE: We're taking fire. We are taking fire.

COOPER: The United States is spending billions of dollars here. DEA agents are training Afghan police to bust drug dealers.

UNIDENTIFIED MALE: Execute, execute, execute.

COOPER: And the State Department is backing the eradication of poppy fields. But the problem keeps growing. Poppy production was up by 50 percent in 2006 alone.

NORINE MACDONALD, COUNTER-NARCOTICS EXPERT: It hasn't worked in three years. And in this last year, we've seen Taliban control spread so rapidly. That's a failed policy.

COOPER: For 2.5 months, our team traveled throughout Afghanistan looking for answers. How did the drug problem slip beyond our control? And what are we doing to stop it?

As far as the eye can see, lush, green fields of crops in bloom. These are poppy fields. And this is Helmand Province in southern Afghanistan. More opium comes from Helmand than anywhere else in the world.

The drug production running rampant, Afghanistan is a country still very much on the brink. The central government is struggling to flex its muscle throughout the 34 provinces and especially here in the south, where America's enemy, the Taliban, is returning. PETER BERGEN, CNN TERORRISM ANALYST: The Taliban basically was pretty much ancient history four years ago. And now they're back because they're deriving money from the drug trade.

DOUG WANKEL, COUNTER-NARCOTICS TASK FORCE: If we lose this government, we could have another 9/11 here. We have to succeed. Not only for Afghanistan, but for the region and for the world.

UNIDENTIFIED MALE: We've got one person in the trees.

COOPER: And Americans are on the ground as part of the effort.

NICK BROOKE, DEA AGENT: I need him to check for narcotics.

COOPER: Nick Brooke is a former marine, a native New Yorker who is now with the DEA. He works with Afghan drug agents. His job, get them ready to bust drug lords.

UNIDENTIFIED MALE: I found a gun here inside the tent.

BROOKE: Let's find out who the owner is. What we're here to do is dismantle large-scale drug organizes that are operating with impunity here. They're allied with war lords and sometimes the Taliban.

COOPER: A DEA agent is ready to take down the dealers. The State Department is working to wipe out the poppies themselves.

Doug Wankel is in charge of the U.S.'s fight against drugs in Afghanistan. He's America's man on the ground. Wankel knows the culture and the people respect him. He was hand-picked for the job because of his 28 years with the DEA. He spent much of that time crushing drug cartels in Southeast Asia and Latin America. Wankel travels the country with his Afghan counterpart, Lieutenant General Mohammad Daud Daud.

WANKEL: As the poppy becomes larger and the stem expands, they can peal it with sticks and things like this. So we have to be prepared maybe to send in police. I don't know.

COOPER: Wankel oversees poppy eradication in the country for the U.S. The goal, wipe out just enough poppy fields so farmers will think twice before they plant poppies again. Lets than 10 percent were wiped out last year. The U.N. estimates that 25 percent eradication would start to turn the tide.

Today we travel with them to Uruzgan Province. Uruzgan is one of the five provinces in the south of Afghanistan where poppies thrive, second only to Helmand Province.

WANKEL: Uruzgan is so remote and has so many problems, that it's sort of what we refer to sometimes as a forgotten province.

COOPER: The country's central government has little power here, making this a fertile ground for drug traffickers, insurgents and the Taliban. Men in their black headdresses are everywhere. And these billboards are the only signs of eradication to be seen. In fact, the governor lives here in this walled compound, which is surrounded by thriving poppy fields.

The problem is literally in his own backyard. Though he knows Wankel and high-ranking officials are here, the governor is conveniently out of town. In this part of the world, it's a grave insult.

WANKEL: What we heard is that he had a death in the family. He had to leave town. We're not sure, but that's the story. And that's the -- it just happened to, you know, coincide with the time that we were coming in for doing eradication.

COOPER: Wankel and Daud bring a message from the United States and from President Hamid Karzai. Stop growing poppies.

WANKEL: There was very little eradication last year.

COOPER: It's an unusually frank discussion.

WANKEL: Some people would question who he eradicated, nonetheless.

COOPER: Deciding whose fields to eradicate is always controversial. Local officials try to influence the decision-making based on loyalties to them and sometimes bribes. Wankel is having none of it.

WANKEL: If you guys want to argue later, we can argue, but that's not now. An eradication will start usually around 8:30, 9:00. And it will be finished by 2:00 or 3:00.

COOPER: Two days later with eradication under way, there's trouble. Gunfire breaks out, they're under attack.

UNIDENTIFIED MALE: We are taking fire. We are taking fire.

UNIDENTIFIED MALE: The Taliban?

COOPER: The gun battle rages for four hours and leaves four Afghan policemen wounded. Eradication efforts here are called off for the season. The farmers, the Taliban, and the drug dealers win this round. Up next, getting Afghans to fight the drug lords and eradicate poppies.

(COMMERCIAL BREAK)

COOPER: Kabul, Afghanistan. Vince Balbu is the DEA's top man in Afghanistan. Balbu and two teams of special trained DEA agents teach Afghans to investigate and arrest drug traffickers.

VINCE BALBU, DEA: They train constantly. When they're not out in the field supporting forces out in the provinces, then they're back here at the main base and they're again honing up on their skills.

UNIDENTIFIED MALE: Quickly, quickly, quickly.

COOPER: It's no small task teaching modern law enforcement in a country where only one in three people can read.

UNIDENTIFIED MALE: Good.

BALBU: Crawl, walk, run. You know, they're learning how to do these simple cases. By simple, I just mean a standard drug buy.

COOPER: The faces of these trainees have been blurred to protect them. Being exposed as a member of an anti-drug force is the equivalent of a death sentence.

UNIDENTIFIED FEMALE (through translator): We joined the fight because drugs are bad and are also against Islam. That's why we are fighting.

COOPER: Chasing drug lords is only part of the fight against opium poppies. On the other side of Kabul, officials from the Ministry from Counter Narcotics use satellite technology to find poppy fields for eradication.

UNIDENTIFIED MALE: We can see the poppies here, here, and in here.

COOPER: The northern provinces are relatively poppy-free. The south is largely under Taliban control, and produces the majority of the opium that leaves the country. In the east, Nangarhar is teetering on the brink.

ABBIE ARYAN, AFGHAN MINISTRY OF INTERIOR: We target the area where we think there are rich farmers or farmers with large land. So, for example in Nangahar, we know the target is here. We pass that information to the governors and we ask them to go to that specific area and do their eradication.

COOPER: Nangarhar is a strategic province in the war on poppy cultivation, and the war on terror. Norine MacDonald is a security and counter narcotics expert for an international policy think tank called the Senlis Council.

MACDONALD: The first thing to know is that Nangarhar is extremely politically significant because it's on the border with Pakistan nearest the area where the al Qaeda and Taliban training camps are.

COOPER: On the way to that border is Tora Bora, the last spot where there was hope to capture Osama bin Laden in 2001.

Since the fall of the Taliban, life in Nangarhar has been improving. Poppies flourish. Production here dramatically fell off in 2005, but rebounded the next year. The U.N. is predicting yet another bumper crop. Crops that end up as heroin on the streets of Europe and America.

We accompanied the province's governor, Gul Agha Sherzai and the State Department's Doug Wankel to an eradication project. The governor is a supporter of the Karzai government and of eradication. For the benefit of our cameras, he takes part in today's operation.

GUL AGHA SHERZAI, NANGARHAR GOVERNOR (through translator): I am trying to arrest the traffickers and turn them over to the police. There is a lot of cultivation here. Al Qaeda, the terrorists, and others benefit when people grow poppies.

WANKEL: Once the poppy's stem has extended, it is very easy for them to go with a labor force to go through and just break this. Before it gets to this height, it's much more effective to use tractors and things of this nature. They can line up 100 people and just go through this and wipe this area out in a matter of an hour and a half or so.

COOPER: This may look ineffective, but in a rumor-based society, it sends a message to other farmers. Your field might be next.

WANKEL: This is what's called the hook (ph) here. You'll see, it's been over this. This is the predecessor to when this will eventually stand up and flower, as you see right here.

Later on, the flowers fall off, as you see this plant. After some days, weeks of maturation, this bulb will generally get bigger, about this big. At the when they then come with the lancing tools and collect the opium gum. It's like a savings account for them. Poppy is a cash crop. It's always worth money.

COOPER: Afghan farmers say they have no other choice. Nothing else makes enough money. Poppies are hearty and drought-resistant. They bring eight times the price of wheat, even though the soaring rate of cultivation means that traffickers will pay less money for the crop this year than last.

WANKEL: Look, we know you need development and that is coming. But the lack of development is not an excuse to go against the constitution to break the law, to support the enemy. That's part of the message that goes out to the people.

COOPER: But in Afghanistan where there's almost no financial support for farmers, poppy comes with a bonus. Drug lords will loan farmers money against their future poppy crops. Money farmers need now to survive.

This farmer has already taken money for these poppies. To pay the debt, the drug lords may demand that he give them one of his daughters.

Up next, is America's war on drugs compromising the war on terror? (COMMERCIAL BREAK)

COOPER: Nangarhar Province, Afghanistan. In April, the governor's forces descend on the district to destroy poppy fields. This is what greets them. Angry farmers block the road and begin throwing stones. Suddenly soldiers open fire, chaos.

The governor's assistant for eradication Massoud Isizi (ph) shows up and gathers the farmers to hear their grievances. Fairly soon, Massoud (ph) resumes eradication efforts throughout the province. He understands their grievances and makes an impassioned speech to the farmers.

The farmers seem to understand and together with Massoud (ph), they clear the road of stones. A few days later, our crew is traveling with Massoud (ph) when we find this field. Burlap sacks are hanging around in it a vain attempt to shield it from view. The crop is being farmed by a woman and her family, sharecroppers on the land.

When she realizes Massoud (ph) is from the government, she begs him to spare her poppy field. Tribal elders tell us to turn off our cameras. It's against Islam, they say, to photograph a women. Off camera, she continues to plead with Massoud (ph). Land owners who are dealing in drugs often pressure their sharecroppers to grow poppy, leaving the farmers no other choice.

HABIBULLAH QADERI, MINISTER OF COUNTER-NARCOTICS: There are two kinds of farms in this country. Some are growing for greed and some are growing for meat. Some really need to be assisted and they really are needy.

ABDUL MANAN FARAHI, HEAD OF COUNTER-TERRORISM POLICE (through translator): The main point is this. The farmers are almost the victims of the dealings between al Qaeda, Taliban, and the drug mafia. The farmers in Afghanistan do not gain much from poppies and drugs except suffering because the poppies and harvest is being bought very cheap.

COOPER: The international community promised that farmers here would be given alternative livelihoods, ways to earn enough money to live. Farmers were giving seeds and supplies to grow other crops and found that no one was interested in buying them. There is always, however, a market for poppies.

MACDONALD: So not only are they back to cultivating poppy because they did not receive any alternative livelihood, but they're angry at the broken promises and they don't trust us anymore.

COOPER: Facing the anger of those farmers, the forces of NATO or ISAF as they're known here. Things are especially bad in Helmand Province in the south. Recently ISAF, the International Security Assistance Force broadcast an announcement on radio in Helmand, which has the highest poppy production in all of Afghanistan.

That's right, NATO, an American ally, saying they will not eradicate poppy fields. The U.S. and Afghan governments were furious, and the commercial was pulled from the airwaves. So why would NATO put out such a message? Because they're the ones who have to deal with the fall-out of eradication. Usually that means unrest and violence.

BERGEN: There are obviously differences between NATIO and the United States about what to do with the drug problem because NATO is sort of trying to distance itself from drug eradication efforts and saying this is not our fight.

COOPER: NATO is reasoning it's simple. Take about people's means of earning a living, and they'll turn against you. Even worse, they'll turn to the Taliban.

MACDONALD: The insurgency will say, see? The foreigners don't care about you. The foreigners are not here to help you. The foreigners are just foreign invaders like we've seen before.

COOPER: Peter Jouvenal has been reporting from Afghanistan for 28 years.

PETER JOUVENAL, BRITISH JOURNALIST: Drug eradication is a fantastic opportunity for the Taliban. You know, it gives them the opportunity to recruit farmers that are fed up with these foreigners coming in and destroying their land.

COOPER: The Taliban resurgence is greatest where poppy cultivation is greatest, in the south. Here, attacks on NATO forces are increasing. Fuelled by drug money and left unchecked, the insurgency is destabilizing President Karzai's government.

GEN. MOHAMMAD DAUD DAUD, HEAD OF COUNTER-NARCOTICS (through translator): There are two challenges to the government of Afghanistan. The first is terrorism. And the second is narcotics. They are not separate. We have to defeat them both together.

COOPER: Drug money is the prime source of funding for the Taliban. The Taliban charged drug lords for protecting smuggling routes. They also run a protection racket, taking payment to keep government forces away from farmers' fields. Mirwais Yasini is a member of the Afghan parliament and the former minister of counter narcotics.

MIRWAIS YASINI, MEMBER OF AFGHAN PARLIAMENT: The drugs are directly funding terrorism. The drug is directly funding the Taliban. And I wouldn't differentiate between the al Qaeda and the Taliban.

COOPER: The drug lords and the Taliban are the only support system that many farmers have. Drug lords provide up-front money and credit for crops. They pay farmers cash and after the harvest, pick up the opium themselves.

For farmers who may not even own trucks, get crops to market, the service is invaluable. This relationship between farmer and terrorists is propping up the Taliban. It's also undermining America's war on terror as well as the security of Afghanistan. BERGEN: Given the fact that this will be another record year for poppy production, given the fact that the Taliban are benefiting from the drug economy, given the fact that we're spending 3/4 of a billion dollars for very little effect, it seems to me that we need to be more creative about what we're trying to do in terms of the drug problem here.

COOPER: The failure in the war against poppy has opened the country, once again, to terrorists who are increasingly killing U.S. and NATO forces.

When we come back, DEA agents on the hunt for drug traffickers.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

TONY HARRIS, CNN ANCHOR: Hello, everyone. I'm Tony Harris. More of CNN SIU's "Narco State, the Poppy Jihad" in a moment, but first, let's bring you up to date on what's happening right now in the news. Tropical Storm Gabrielle taking aim at the North Carolina coastline. The storm could hit the area sometime tomorrow afternoon. But Gabrielle's soggy outer bands could strike in the next few hours. Tropical storm warnings and watches are in effect in North Carolina and Virginia.

Friends and relatives of Gerry and Kate McCann are outraged that Portuguese police have been named suspects in their daughter's disappearance. Four year old Madeleine was last seen May 3rd at the family's holiday apartment. The McCanns say they'll stay in Portugal to help police and to prove their innocence.

The Algerian press service reports at least 30 people are dead and another 47 wounded in a car bombing targeting a coast guard barracks. It's Algeria's second bombing since Thursday when 19 people died and more than 100 were hurt. Al-Jazeera reports a North African al Qaeda cell is claiming responsibility for both attacks. Still no sign of missing aviator Steve Fossett.

He disappeared Monday after he took off from a Nevada airstrip. Teams have expanded the area of their searching from 600 square miles to a 17,000-square-mile grid. An official with Nevada's Civil Air Patrol says she expects the search to go on for two weeks or even more.

Laura Bush back at the White House, resting tonight after some out-patient surgery earlier today. Doctors worked to relieve pinched nerves in the first lady's neck. The surgery reportedly to be minimally invasive. It lasted two and a half hours. The White House says it was a success. I'm Tony Harris in Atlanta. Now back to CNN's SIU's "Narco State: the Poppy Jihad."

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: There will be a buy/bust operation.

COOPER: ... for DEA agents agreed to take our crew on a buy/bust operation in Kabul. Agent Nick Brook is in charge.

NICK BROOKE, DEA AGENT: OK. Operation Trojan Horse is ...

COOPER: Operation Trojan Horse will be a drug sting carried out by Afghan undercover officers under the direction of American DEA agents. Their target is a former mujahideen fighter.

BROOKE: Obviously involving narcotics trafficking and possible weapons distribution. So be very careful of this guy. Go see your commander. Get these weapons issued and get into your equipment within the next few minutes. And be ready to go.

COOPER: For the Afghan undercover agents, this is a critical opportunity. Not just to arrest the suspect, but to hone their investigative skills. For the DEA, the stakes are higher. These busts helps to connect the dots between local traffickers and the drug mafia that's profiting from Afghanistan's insurgency and chaos.

As soon as they learn the undercover buy has gone through, they get the signal to move in.

UNIDENTIFIED MALE: Execute, execute, execute.

COOPER: With these two men in custody, the next order of business, search for the drugs in the two target houses. The drugs turn up in one of the backyards.

UNIDENTIFIED MALE: You, we found it back here. That's the bag where it was brought out from the other compound up the hill and then those are the four additional kilos plus the ones we purchased. We have six right now, I believe.

UNIDENTIFIED MALE: Is that the target?

UNIDENTIFIED MALE: We believe he is. We're going to have to have the informant make a visual identification in order to arrest him.

UNIDENTIFIED MALE: Heroin.

COOPER: When they began working with the DEA, some of these men had no law enforcement experience whatsoever. Today they're carrying out field testing of confiscated drugs.

UNIDENTIFIED MALE: At this point it appears to be morphine- based.

COOPER: The presence of morphine indicates heroin. But as the testing is going on, the agents discover they don't have their man after all.

UNIDENTIFIED MALE: It's not him?

UNIDENTIFIED MALE: No.

UNIDENTIFIED MALE: You're sure? UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: This is not the target. We need to figure out who that is. Who is the individual that lives next door?

COOPER: Then they get a tip from one of the men in custody. He said their target has fled to one of the compounds up the hill.

UNIDENTIFIED MALE: Let's go.

COOPER: No luck. He's not there.

BROOKE: The story is we followed two leads. They were negative. Now we believe the guy who brought the heroin to us, the main guy, the brown manjam (ph) wearing guy hopped over the fence to the west. But we had the perimeter secured. So we're doing a house-to-house search in the hopes that we find him hidden in one of the compounds.

UNIDENTIFIED MALE: Here.

BROOKE: Down here?

UNIDENTIFIED MALE: Yeah.

COOPER: Do you think he's still in the area?

BROOKE: Yeah, I think he's hiding in one of the compounds here. There's just too many compounds. We need to focus us on the investigation to lead us to where he is.

Let's load them up. Let's get out of here.

COOPER: Back at the station, testing of the drugs continues. On the streets of new york, these drugs would be worth half a million dollars.

UNIDENTIFIED MALE: Here they call it beast. Beast heroin. That's what we actually negotiated for 10 kilos of beast. They'll further do the chemical process at another location to make it either the next level of heroin which is tahn (ph) or white heroin which is called spin or crystal.

COOPER: The suspects have been blindfolded so they can't identify the location or the Afghan undercover agents. Even though the primary target hasn't been caught yet, agents say this is a significant bust. Not just because of the drugs they seized, but because arrests were made. Arrests send a message. The government is holding people accountable for dealing drugs.

Coming up next, connecting the dots from smugglers to drug lords.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE) COOPER: Twenty-year-old Ismap (ph) was arrested at Kabul International Airport. Border police said he looked suspicious. He was nervous, sweating, and had booked a tickle from Kabul via Dubai to China, a common smuggling route out of Afghanistan. He was detained while the officers searched his luggage.

Ismap was detained while the officers searched his luggage. Concealed in his bag, 1.9 kilos of heroin carefully hidden in the lining. He has a street value of $100,000 in new york.

GENERAL ABEEL, COMMANDER OF BORDER POLICE (through translator): The X-ray machine couldn't detect drugs in the bags, but our police became suspicious of them and luckily, their suspicions were correct.

COOPER: Ismap was taken to central narcotics police headquarters where he was booked and charged. If convicted he'll serve anywhere from five to 15 years in prison. We spoke to him after his arrest. He told us that he was out to make quick money and that he had successfully avoided detection before.

UNIDENTIFIED MALE (through translator): The same person who gave me the drugs this time gave me the drugs the last time. I never would have done this if my life was good. I was in debt. And people were asking for their money. So finally I decided to do this.

COOPER: In Afghanistan, connecting dots from the small traffickers like Ismap to the drug lords controlling the trade is a massive undertaking. Once arrested, there's still many ways to escape justice. He can bribe a prosecutor or a judge or pay off a prison guard.

The country's outspoken attorney general Abdul Jabar Sabed (ph) has declared war on this kind of corruption. Sabed returned after years in America to help his country get back on its feet.

When we arrived to interview him in his office in Kabul, there were more than 100 people gathered to see him. In addition to running the country's legal system, he also arbitrates land and family disputes.

(on camera): What is the biggest problem Afghanistan faces right now?

UNIDENTIFIED MALE: The biggest is corruption. If we do not have corrupt police, if we do not have corrupt prosecutors, if we do not have corrupt judges, then the drug dealers and all of the terrorists who are arrested would be brought to justice.

COOPER: Does the drug trade contribute to corruption?

UNIDENTIFIED MALE: Drug trafficking?

COOPER: Yeah.

UNIDENTIFIED MALE: Corruption and terrorism are linked. They're linked to each other. COOPER: Is Afghanistan in danger of becoming a narco state?

UNIDENTIFIED MALE: If we overcome the terrorist problem, I am sure we will -- we will be able to deal effectively with the narcotics dealing.

COOPER (voice-over): There are some signs of progress. In June 2007, DEA and Afghan agents arrested Abdul Kalik (ph) a provincial police chief. The bust netted 30 kilos of heroin. On some streets America, about $1.5 million worth. But the big news was the arrest of such a prominent official. This was an exception.

UNIDENTIFIED MALE: Hello.

COOPER: And to corrupt government officials, war lords, and drug dealers, Attorney General Sabed is a target.

(voice-over): In Afghanistan, safe is a relative term. Two months after our interview, Sabed's convoy was ambushed on the way to Parwan Province where he planned to issue an arrest warrant for a general. Sabed was taken from the car, beaten, and nearly kidnapped. A gun battle ensued. He and his team barely escaped with their lives.

Up next, is Afghanistan once again becoming a safe haven for terrorists?

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

COOPER: It's spring in the eastern Afghan province of Nangarhar. Harvest season has begun. We secured access to a poppy field inside a sprawling walled compound in the Rodat (ph) District of Nangarhar.

Opium harvesting is a labor-intensive process requiring the work of many farmers over the course of several weeks. The plants are ready when the flower drops its petals, leaving behind a capsule pregnant with opium. The only tool used is a piece of wood embedded with sharp blades.

UNIDENTIFIED MALE (through translator): When it's harvest time, we slice the capsule, then leave until the next day. Then we collect the opium the next morning. I have six acres. It takes 16 days to collect the opium.

COOPER: After the opium has oozed out, the farmers roll it up into balls.

UNIDENTIFIED MALE (through translator): Then it's put in the leaf and it becomes opium.

COOPER: This farmer says his family has been growing poppy for 100 years. He grows it, he says, to pay for the weddings of his six sons. He says this is their only choice.

UNIDENTIFIED MALE (through translator): We do believe that this haram, that this forbidden in Islam. There is no dispute about that. But what shall I do? There is no alternative crop that we can survive on. Look, there are poppy growing here as far as the eye can see.

COOPER: After the harvest, farmers can store the opium. Or it can be refined into heroin in primitive labs like this one.

Our crew wasn't able to go into these labs on our own. It was simply too dangerous. Even the Afghan locals who shot this exclusive footage was unwilling to visit at lab when it was in use. Some of the bins still contained raw opium. The process of refining heroin involves repeated cooking and drying. It increases the potency and the value.

This particular lab is located in the Spingar Mountains. Spingar means white. It's also the name of the best Afghan heroin money can buy. From here, it's only a 30-mile drive to the border with Pakistan.

High in the mountains along barely marked trails, there's a steady stream of traffic. Camels and mules are laden with bundles. We're only about 50 miles from Tora Bora where Osama bin Laden escaped allied forces in 2001.

The mountainous terrain and remoteness of the area make it nearly impossible to control this border or stop the flow of opium and heroin. The men we talked to were reluctant to discuss drug smuggling.

UNIDENTIFIED MALE (through translator): I don't know what opium is. Is it like sugar?

COOPER: In Afghanistan, border guards are notoriously corrupt. These guards assured us that no illegal substances were getting through their make-shift checkpoint.

UNIDENTIFIED MALE (through translator): These things don't come this way because our checkpoints are here.

COOPER: But the inspections we saw were perfunctory at best.

UNIDENTIFIED MALE (through translator): If there are six or 10 camels or donkeys, they will not search all of them. Only one or two. Of course, it's easy for them to get in and out whenever there aren't government checkpoints. Everybody knows that. It's a long border.

COOPER: Drugs leaving the country here go to Pakistan and then are transported to Iran where they're sent to Turkey and then to Europe. From there in small but increasing numbers, heroin makes its way to America.

In the U.S., a kilo of high-grade heroin going for $100,000. To grow the opium that this heroin with came from, a harmer probably earned about $300. In the mountains of Nangarhar, local officials have come to burn confiscated heroin and hashish. Representatives from the national government are on hand to make sure the destruction is carried out.

In Afghanistan, this represents a major haul. But compared to the 6,100 metric tons of opium produced last year, it's barely a drop in the bucket.

UNIDENTIFIED MALE: The campaign of their education is not finished. We start our jihad or fight against the drug. Every kind of drug which we have where there is hashish or narcotics, we are trying our best to reach them and teach them that what they are deal is illegal of the constitution of Islam and the constitution of our government. That for their personal interests, they are destroying their country.

COOPER: As the security situation in Afghanistan deteriorates, it becomes more and more critical to stop the flow of drug money to the Taliban. But in the country that produces 92 percent of the world's illicit opium, this terrorist war chest is only getting bigger.

UNIDENTIFIED MALE: Afghanistan is sort of at a tipping point. The Taliban want to show that they can come back and still be a big problem. The international community has to show it's getting a grip on things.

This place has shown itself to be very, very usable for the fundamentalists to operate from, to do whatever is necessary to continue their war of terrorism.

UNIDENTIFIED FEMALE: Anyone who wants to remember 9/11 should be very concerned about what's happening in Afghanistan right now.

(END VIDEOTAPE)

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